Strategic postures of third‐party logistics providers in mainland China

Abstract

Purpose To examine the strategic posture of third‐party logistics (3PLs) providers in mainland China. Design/methodology/approach A sample survey, obtained by mail, of 3PLs firms in mainland China. Key informant data are used to operationalize Porter's competitive strategy and provides a framework to identify logistics strategies pursued by 3PLs providers. Various aspects of 3PLs providers are compared by different strategy types. Findings Identified four logistics strategies pursued by 3PLs providers in mainland China. Differentiation strategy outperforms cost leadership strategy. Companies pursuing cost leadership are shifting towards differentiation strategy to cope with the intense competition faced in mainland China's immense logistics markets. Research limitations/implications Bias may exist due to the mail survey. In‐depth studies on strategy formulation of 3PLs providers could be carried out to examine what factors influence the strategy formulation and explore the strategy evolution path. Practical implications This study is a very insightful source of information about 3PLs in mainland China for logistics managers, investors and policy‐makers. It provides guidance for 3PLs executives to formulate logistics strategy, adjust business objectives and prioritize operations, and for logistics users to select appropriate logistics providers. There are also suggestions for government to improve the business environment for the logistics industry. The study provides a basis for research on logistics management in mainland China. Originality/value This study is a pioneer and comprehensive study of mainland China's 3PLs providers. To the best of our knowledge, this is the first study to examine 3PLs providers in mainland China.